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Wednesday, December 23, 2009

head scratcher

All my trades are doing pretty well, except for GS. The financials are sucking wind, and the level of weakness I am seeing makes me scratch my head. I understand the macro economic effects that are plaguing the banks, but to be seeing the level of weakness in GS after a multi-month consolidation is perplexing.

Basically from August until now, the financials have done nothing. Which means the market has been consolidating their monstrous move. That makes complete sense. But there is a chart set-up in GS (w/in the daily chart) that suggests further weakness. That part makes very little sense to me.

IMO, fundamentally speaking, the banks are in a position to stall. To trade range bound until their balance sheets are really cleaned up. There are too many negatives to cause a next leg up rally, but their are multiple positive developments to prevent a break down.

This is where I am scratching my head. These positive developments, which are supporting the general market, are being completely ignored w/in the financial space at the moment or so the chart set up suggests.

At times I question why I even bother with fundamentals. It gives me such an interal conflict at times. Ignoring fundies would spare me much self generated turmoil through the years... 'woah is me' ;) But then again, two very recent examples where the charts gave a very wrong (and negative) impression of the fundamentals were in CHK and PWR. So I guess that 'ying and yang' effect has some merit.